Indian Stock Market Extends Rally on Trade Deal Momentum and Positive Macro Data
Indian benchmark equity indices, the Nifty50 and the BSE Sensex, opened higher on Tuesday, building on the ongoing bullish momentum following the announcement of the India-US trade agreement. The market's upward trajectory reflects growing investor confidence in the domestic economic landscape.
Early Trading Performance and Key Levels
In the initial trading hours, the Nifty50 index surpassed the psychological level of 25,900, while the BSE Sensex advanced by over 150 points. At 9:16 AM, the Nifty50 was trading at 25,918.55, marking a gain of 51 points or 0.20%. Simultaneously, the BSE Sensex stood at 84,232.68, up by 167 points or 0.20%.
Expert Analysis: Macro Tailwinds and Sectoral Outlook
Market analysts emphasize that near-term direction will hinge on global macroeconomic trends, currency fluctuations, and the persistence of risk appetite, particularly from foreign institutional investors. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided an optimistic assessment.
"Tailwinds for the market are strengthening daily," Dr. Vijayakumar stated. "Economic growth prospects are exceeding earlier optimistic forecasts. A pivotal macro development is the turnaround in private capital expenditure, which had been sluggish for years."
He highlighted that H1 FY26 data from a sample of listed companies shows a 13.1% year-on-year increase in fixed assets, signaling accelerated private capex. This trend is corroborated by a recent uptick in bank credit growth.
"In summary, these macro developments could propel GDP growth above 7%," he explained. "With inflation expected to rise to 4% in FY27, this may translate into nominal GDP growth of approximately 10.5% and corporate earnings growth exceeding 16%. The market will begin discounting these positive factors, especially as the US-India trade deal no longer poses a constraint."
Dr. Vijayakumar added that financial sectors are poised to outperform in the rally, while IT may continue to underperform due to pressures from the Anthropic shock. The recovery in small-cap stocks is likely to bolster retail investor enthusiasm, contributing to market resilience.
Global Market Context and Commodity Movements
Asian markets extended gains, reaching fresh record levels as a rebound in US technology stocks gained momentum. The stabilization of tech shares alleviated earlier investor concerns about elevated artificial intelligence spending, supporting broader regional sentiment.
In US markets, the S&P 500 and Nasdaq posted strong gains after a volatile start to the week. Technology stocks recovered from last week's selloff linked to AI-related worries, with investors awaiting upcoming economic data for clues on the Federal Reserve's interest rate path.
Meanwhile, gold and silver prices declined as the US dollar strengthened from a more than one-week low. Market participants are anticipating key US employment and inflation data later in the week for further insights into interest rate outlooks.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
